On July 13, 2011, Connecticut Governor Malloy enacted legislation that will prohibit certain employers from using credit reports in hiring decisions.

The new law goes into effect on October 1, 2011, and will prohibit employers from requiring an employee or prospective employee to consent to a request for a credit report as a condition of employment. Exceptions to the statute are employers that are financial institutions, credit reports required to be obtained by employers by law, and credit reports substantially related to the employee’s current or potential job.

Credit reports that are “substantially related to the employee’s current or potential job” are allowable if the position:

Is a managerial position that involves setting the direction or control of a business, division, unit or an agency of a business;

Involves access to customers’, employees’ or the employer’s personal or financial information, other than information customarily provided in a retail transaction;

Involves a fiduciary responsibility to the employer, as defined under the law;

Provides an expense account or corporate debit or credit card;

Provides access to certain confidential or proprietary business information, as defined under the law; or

Involves access to the employer’s nonfinancial assets valued at $2,005 or more, including, but not limited to, museum and library collections and to prescription drugs and other pharmaceuticals.

Connecticut joins Hawaii, Illinois, Maryland, Oregon, and Washington as states that currently prohibit the use of credit history in employment decisions.

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here's no time like the present for employers to ensure that their hiring processes are in compliance with applicable federal and state laws, including the federal Fair Credit Reporting Act.